City of Vallejo City Council Special Meeting May 21, 2019 Update on the Water Department and Recommended Water Rate Plan
Agenda Today’s focus: Vallejo Water System (not Green Valley or Travis) 1. Meeting Objectives 2. Update on Your Water System 3. Rate Study Process 4. Financial Proposed Rate Adjustments 5. Plan Rate Adjustment 6. City Council Questions and Comments 7. Next Steps 2
Meeting Objectives • Update on the Water Department/Water Enterprise • Summary of: – Accomplishments, Initiatives In Progress & Challenges • Recap Rate Study Goals & Process • Review Water Enterprise Financial Strategy • Proposed Water Rate Increase • Comments from: – Citizens Water Rate Working Group – Council Ad Hoc Water Rate Committee – Community – City Council 3
Vallejo Water’s Conveyance System for Untreated (Raw) and Treated Drinking Water Multiple • Sources of Raw Water Complex • and Multi- Layered Source • Water is 20+ Miles from Treatment Plant 4
Update on Vallejo Water Department Until 2017 Water–Related Functions Were Divided Among Two Divisions of the Public Works Department: Water Division and Maintenance Division -Water Treatment -Water Distribution -Laboratory -Warehouse -Facilities Maintenance -Water Engineering -Admin/Conservation 5
Four Reasons for Transition From Division to Department 1. Critical public service : drinking water & fire suppression 2. Consolidation/Efficiency: All water-related operations consolidated into one department 3. Strategic Challenges: require direct attention of City Manager and City Council (rates, economic development, deferred maintenance and infrastructure, financial sustainability, community involvement in rates) 4. Leadership Opportunity: PW Water Division Head vacancy created opportunity to recruit executive level position to lead the new Water Department 6
Newly Consolidated Water Department Established 4/17/17 Water Director Mike Malone Water Admin & Conservation 8 Employees Water Operations Manager Beth Schoenberger Water Engineering Treatment Water Quality/ Distribution Water Facilities Manager Superintenden t Laboratory Superintendent Superintendent Mark Quady Joe Abitong (Acting) Danielle Bonham Oscar Alcantar John Palesi 10 Employees 21 Employees 4 Employees 37 Employees 15 Employees 7
Water Department Vision To be a respected leader in municipal water resources. Water Department Mission To provide our customers reliable, high quality water services in a fiscally responsible and environmentally sustainable manner. City of Vallejo
Water Department Values Reflects top 8 values identified by Water employees at all levels of the organization. CUSTOMER SERVICE - We provide our customers with excellent service every day. • INTEGRITY and TRUST - We are ethical, honest, trustworthy, and accountable for our actions. • CONTINUOUS IMPROVEMENT - We continuously evaluate and improve our systems and • operations and embrace new technology and practices to be better tomorrow than we are today. TEAMWORK and PROFESSIONALISM - We collaborate, respect, and support each other and • act with loyalty towards a shared vision. EXCEPTIONAL EMPLOYEES - Our employees are our most valuable resource. We develop, • enhance, and retain an exceptional, diverse, and professional workforce. QUALITY COMMUNICATION - We maintain clear, open, direct, and timely communication. • COMMUNITY ENGAGEMENT - By engaging, seeking input, and giving back to our community, • we are valued and respected. PREPAREDNESS - We protect our resources and assets by planning and preparing for future • challenges and opportunities.
Water Department Strategic Goals • PUBLIC TRUST - Build and maintain public confidence and understanding through communication, delivery of quality services, responsive customer service, transparency, accountability, cost controls, and compliance with environmental regulations. • INFRASTRUCTURE RELIABILITY - Deliver reliable services through proactively maintaining our infrastructure assets and reducing system vulnerability over the long term at the lowest possible life-cycle cost. • SUSTAINABILITY - Plan for current and future generations by protecting, preserving and enhancing water resources, the environment, and the community. • ORGANIZATIONAL PERFORMANCE - Develop and retain a competent, collaborative, and adaptable workforce in an organization that demands accountability and innovation, and ensures cost- effective operations. • FINANCIAL VIABILITY - Maintain a sustainable financial structure that responsibly invests in infrastructure, ensures full cost recovery and appropriate reserves, controls costs, and optimizes financial resources.
Vallejo Water Rights & Water Demand 18,000 Acre Feet Average Annual Water Demand • Lake Berryessa Solano Project 14,600 acre foot entitlement per year • North Bay Aqueduct (NBA) - Delta Water State Water Project and Vallejo Permit Water 28,400 acre foot total entitlements per year 43,000 Acre Feet = Total Annual Water Rights (= 14 billion gallons) 12
Vallejo Water By the Numbers Your Water System By The Numbers Note that 16 employees in Water Billing and Commercial Services (meter readers) • are in the Finance Dept. 12
Vallejo Water By the Numbers Capital Debt Operations and Maintenance Projects Service 76% 13% 11% 13
Vallejo’s Current Water Rates Among Lowest In Region Regional Comparison of Average Residential Monthly Bill Rate For average single family monthly use: ¾” Meter, 8 Units of Water (5,984 gallons) $68.79 Martinez $65.53 Contra Costa Water $65.20 Sonoma $59.34 Pittsburg $56.25 EBMUD $55.38 American Canyon $54.45 Benicia $48.28 VALLEJO CURRENT $47.49 Suisun $44.86 Fairfield $41.82 Napa $0 $10 $20 $30 $40 $50 $60 $70 14
Recent Accomplishments & Ongoing Initiatives Completed • Optimized emergency response effort by negotiating mandatory standby (7-days a week on call) • Completed Distribution Improvement Plan and Updated Classifications to Industry Standards • Launched Water Department Employee Recognition Program to Improve Morale • Increased Engagement with Neighborhoods, Local and Regional Organizations • Increased Water Support for City Economic Development • Supplemented Water Rate Revenue by Gaining $1.2M Revenue from Solano County Water Agency Water Exchange 15
Recent Accomplishments & Ongoing Initiatives In Progress: Customer Rate Assistance Program • Advanced Metering Infrastructure and Automatic Meter Reading (AMI/AMR) • Energy Services Company (ESCO) RFP • College-Age & High School Sponsorships • Service Line Warranty Program • After-hours answering service (Daupler Inc.) • Computerized Maintenance Management System (CMMS) • Council-approved MOU with County for Green Valley Collaborative Problem- • Solving Review Customer Service Standards • Supervisory Control Data Acquisition (SCADA) improvement initiatives • Ongoing Pursuit of Grant Funding and other Non-Rate Revenues • 16
Water System Challenges • Insufficient capital spending to replace aging infrastructure • Deferred maintenance due to insufficient funding • Mounting regulatory requirements (without funding) • Out-of-date information technology • Vacancies, retention, and failed recruitments • Increasing security requirements 17
Challenges: Increased Regulatory Requirements (without funding for staffing to do the work) Recent example: Lead Fixture Testing - State requires all Water agencies to test drinking fountains and faucets in all public schools K-12 for lead. Staff time is required for training, planning, coordination, implementation, sampling, testing. No funding is provided to carry out the work, so staff works longer hours to ensure compliance. 18
Challenges: Aged Infrastructure & Deferred Maintenance Mineral corrosion (a common problem in old pipes) is not a health hazard, but reduces water flow and pipe life. Reduced flow increases electrical pumping costs. Aged Pipe : New Pipe Treatment Plant mineral deposits Aged Basin Flocculation Trough Skyview Water Tank In Need of Cleaning Cache Main Pipeline Break and Maintenance 19
Challenges: Vallejo Pipeline Breaks & Leaks vs. National Rankings • Mile for Mile, Vallejo Pipes Break and Leak More Often Than “Worst Case” Water Agencies Nationally Number of Pipeline Breaks and Leaks Per 100 Miles of Pipe 2017 American Water Works Association National Benchmark Survey 20
Challenges: Tackling Deferred Maintenance and Capital Infrastructure California State Maritime Replacing Summit Raw Water Academy Water Main Repair Reservoir Membrane Liner Carter Street Pump Station Repair 21
Water System Challenges: Vallejo Pipe Replacement vs Industry Standard American Water Works Association industry standard pipeline replacement cycle is 75 - 100 years. 23% of Vallejo’s 475 miles of pipeline is over 70 Years Old • Vallejo’s current pipeline replacement cycle is 450 years. • Vallejo Water’s goal is to establish a pipeline replacement cycle of 100 years. 22
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